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Tuesday, July 24, 2012

How Getting Out of Debt Has Changed Our Worldview

Now that we've actually committed to getting out of debt, I feel as though I've had blinders lifted from my eyes about the way we used to use money. Thanks to inspiration by Dave Ramsey, we've begun to realize that the world had trained us to view debt as normal, how little understanding we had of where our money was going, and how much we were wasting. Since we've had this epiphany of sorts, our worldview has changed in what feels like a fundamental and permanent way. Here are four things we view much differently now that we're getting out of debt.

Food Prices
My husband and I used to think we were getting a great deal when we'd go out to Applebee's for its 2 for $20 dinner special. Now that we've cut our food budget down while we get out of debt, spending $25 on dinner is out of the question. We can easily eat just as tasty a dinner at home for a tiny fraction of that cost. That's not to say that we would never go out for dinner again, but it doesn't make sense to us to overpay for dinner when we're paying interest on our debt. We have the same experience while grocery shopping as we realize how much of our budget is accounted for by meat, how much we can save by choosing store-brand products, and how to use coupons effectively rather than as an excuse to spend extra money.

Credit Cards
Believe it or not, my husband and I actually cut up our credit cards into pieces. We used to think they were a necessity, but as we get out of debt, we survive easily with cash and our debit cards. The thing about using credit cards is that it's like playing with fire. We spent many months using our credit cards as debit cards and dutifully paying off our balance at the end of each month. That is until we started having some larger expenses, missed a payment here or there, and ended up carrying a balance again. Now when we see credit card offers show up in our mailbox, we use Dave Ramsey's terminology and call them "invitations to go into debt."

Impulsivity

Gone are the days when my husband would take his credit card
with him to the hardware store and return with something he just had to have for the unbelievably low
sale price of $100! No longer do I bring my credit card to work and decide to
buy a $7 meal because I didn’t have time to pack my lunch in the morning. As
we’re getting out of debt, we now plan all our purchases out in advance and
discuss them together. If we don’t have the allocated cash to pay for something,
we don’t buy it. Through this system, we’ve learned a lot of discipline and the
true value of a dollar.

Social Activities

To be sure, our social lives are affected by our decision to
live frugally while we get out of debt. It’s not easy to accept a last-minute
invitation to go to a movie or to the zoo or anywhere else that costs money if
we haven’t budgeted for it. In order to do things like that, we’d have to
shuffle things around and sacrifice in other categories in order to maintain a
zero-based budget. But fortunately, there are plenty of ways to stay
entertained that don’t cost much,
such as potlucks, drink nights with friends, watching DVDs, or taking
walks.